U.S. Changing Mood on Trade, to a Point

In the midst of the swine flu outbreak, President Obama heeded the advice of his health officials and did not close the U.S. border with Mexico. "From their perspective, it would be akin to closing the barn door after the horses are out," he said in a press conference commemorating his 100th day in office.

In light of the current global economic crisis, it was a welcome moment: Politics followed good science and sound economics. With trade between both nations reaching $367.5 billion last year, closing the border for just a couple of weeks easily could have made the remedy more costly than the disease.

Homeland Security Secretary Janet Napolitano directly defended Obama's decision. "You also have to understand the inordinate costs associated with closing a border -- the number of jobs associated with that, the trade that goes back and forth," she said on national television. Aside from a few predictable anti-immigrant zealots who saw the flu as the perfect excuse for closing the border, there was no public outcry in the United States against keeping trade flowing.

What a difference a crisis -- or two -- can make.
It was barely a year ago when, at the height of the Democratic primaries, free trade was demonized and the North American Free Trade Agreement in particular became a punching bag. Both Sen. Hillary Clinton and Sen. Barack Obama indicated NAFTA had been bad for the United States and pledged to renegotiate it or withdraw from it.

As the world economy began its more serious downturn in the fall, economists and world leaders remembered that rhetoric and worried the United States would return to the kind of protectionist policies that helped bring on the Great Depression. It was probably no coincidence that at the first meeting of the G-20 in Washington -- just days after Obama's election -- leaders called on all member nations to commit to free trade.

Since Obama took office, his administration has resisted protectionism. After returning from the Summit of the Americas last month, U.S. Trade Representative Ron Kirk finally put to rest any doubts that Obama may still want to renegotiate NAFTA. He told reporters in a conference call that labor and environmental provisions could be improved "without having to reopen the agreement."

The U.S. public has rediscovered its support of free trade as well. A Pew Research Center poll recently found that "despite the economic recession, public support for free trade agreements has recovered after declining a year ago." Other recent national surveys have found similar results. A CBS News/New York Times poll in early April found that 66 percent said "trade with other countries -- both buying and selling products" is good for the U.S. economy; 58 percent expressed that view in March 2008.

The recession may have helped firm up consensus against protectionism, but don't expect the Obama administration to commit the time and energy to new agreements that George W. Bush did. As Eric Farnsworth, the vice president of the pro-free trade organization Council of the Americas, says, it's one thing to be on the "defensive" when it comes to trade; it's quite another to be on the "offensive."

"I don't think this administration or even this Congress is protectionist for the most part," Farnsworth said before adding that no president would prioritize trade deals in the current economic climate.

While U.S. politicians and the American public may be far less protectionist than they were a year ago, the recession remains a major hurdle to deals that open new markets to U.S. goods but can be described by opponents as job killers.

If that weren't the case, the long stalled U.S.-Colombia free trade agreement would be gaining some traction in Congress, where it has been in a rut for 13 months. Instead, Colombian officials recently met with Obama trade officials for the first time and agreed to create teams to discuss the issues blocking the agreement's passage.

That's not exactly the urgent action you would expect if, as some U.S. business representatives try to argue, the deal will create new opportunities and help compensate for domestic loses. Citigroup, for instance, just reported its second-best Latin American quarter earnings in history while losing millions in North America.

Meanwhile, Caterpillar, a major heavy machinery supplier to Colombia's coal industry -- which is one of the top 10 in the world -- could soon be at a disadvantage if the deal continues to flounder.

Canada, the home nation to one of Caterpillar's greatest competitors, is moving ahead with a trade deal of its own with Colombia. Although negotiations began after the U.S.-Colombia agreement's inception, the Canadian deal could be ratified first -- despite the recession.